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Williams v Roffey Bros & Nicholls (1989) CA
This case significantly revisits the concept of consideration in contract law, challenging the strict precedent set by Stilk v Myrick. The core issue is whether a promise to pay extra for the performance of an existing contractual duty constitutes valid consideration.
I. Case Facts:
The central question: Did Williams provide sufficient consideration for the extra £10,300 promised by Roffey Bros? The traditional view (from Stilk v Myrick) would say no, as Williams was already contractually obligated to do the work. However, the Court of Appeal disagreed.
This case significantly revisits the concept of consideration in contract law, challenging the strict precedent set by Stilk v Myrick. The core issue is whether a promise to pay extra for the performance of an existing contractual duty constitutes valid consideration.
I. Case Facts:
- Contract 1: Roffey Bros (defendants) hired Williams (plaintiff) to do carpentry work for £20,000. This price was later deemed too low by a surveyor (£23,783 would be reasonable).
- Problem: Williams ran into financial difficulty due to the low price and poor work supervision. He risked not completing the contract.
- Contract 2 (the crucial part): Roffey Bros promised an additional £10,300 to ensure timely completion. Williams agreed and continued working.
- Outcome: Williams completed most of the work but stopped before total completion. He sued for the additional payment.
The central question: Did Williams provide sufficient consideration for the extra £10,300 promised by Roffey Bros? The traditional view (from Stilk v Myrick) would say no, as Williams was already contractually obligated to do the work. However, the Court of Appeal disagreed.
- Glidewell LJ's Five-Part Test: This test provides a practical framework for determining consideration in situations like this:
- A contract exists between A and B.
- B doubts A will complete the contract.
- B promises A extra payment for timely completion.
- B obtains a practical benefit (avoiding penalties, finding a new subcontractor, etc.)
- The promise isn't due to duress or fraud. If all five conditions are met, the benefit to B is valid consideration.
- Russell LJ: Argues that the rigid approach of Stilk v Myrick is outdated and unnecessary. Consideration must still exist, but the courts should be more willing to find it, particularly when bargaining power is equal and it reflects the parties' true intentions. He highlights that completing the work and providing a more structured payment plan are practical benefits.
- Purchas LJ: Initially considered the case similar to Stilk v Myrick, but accepted that a modern approach recognizes mutual benefits, even without detriment to one party. The practical benefits to Roffey Bros (timely completion, avoiding penalties) were sufficient consideration.
- Practical Benefit: Williams v Roffey introduces the concept of "practical benefit" as sufficient consideration. In Stilk v Myrick, the sailors were already obligated to complete their voyage; there was no practical benefit to the captain beyond what was already promised. In Williams v Roffey, Roffey Bros avoided the costs and inconvenience associated with finding a replacement contractor.
- Bargaining Power: The court emphasized the absence of duress or inequality in bargaining power. Williams wasn't forcing the extra payment; Roffey Bros freely offered it to secure completion.
- Consideration: Something of value exchanged by each party in a contract. This case broadened the understanding of what constitutes valid consideration beyond simply fulfilling a pre-existing legal duty.
- Practical Benefit: A benefit obtained by one party beyond the strict legal terms of the original contract.
- Economic Duress: The illegitimate use of pressure to induce a contract. The absence of duress in this case is vital.
- Stilk v Myrick: The traditional precedent that the performance of a pre-existing contractual duty is insufficient consideration. Williams v Roffey modifies, but doesn't completely overturn, this precedent.
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